The recent ruling by the Federal Court of Justice in Karlsruhe on the issue of cum-ex transactions looks set to have a major impact on numerous parties both in Germany and further afield. The cum-ex court decision at Germany’s highest court ruled to uphold the judgment of the Bonn district court from March 2020, after the defendants appealed. The Federal Court of Justice ruling concluded that the cum-ex transactions were illegal. In the Bonn ruling, one of the parties was ordered to pay back 14 million euros, and a private bank MM Warburg was left with a fine of €176 million.

This cum-ex court decision looks set to open the floodgates, and more court cases will be heard in the future. Already many court cases are pending. The cum-ex transactions involved many parties, including private investors, banks and other financial institutions, and billions of euros were involved. With so many different elements involved in the matter, many people may be caught in the middle. If you require legal support on this matter, don’t hesitate to contact Schlun & Elseven Rechtsanwälte.

Our Legal Services

Schlun & Elseven Rechtsanwälte is a full-service law firm based in Germany. We provide our clients with expert legal assistance in all matters relating to the cum-ex court decision and related matters. Our criminal defence lawyers provide clear advice, comprehensive legal counsel regarding the German criminal law system and expert strategies in and out of court.

Many people may have been caught up in cum-ex transactions due to unreliable investment advice, and working with our experts is a means of rebalancing the situation. This is especially true for clients from outside of Germany who may not be familiar with how the German legal system works. We provide all of our services in English as well as German.

Furthermore, extradition law is another area our team specialises in. When facing an extradition request or an Interpol Notice, it is crucial to consult with experienced legal professionals. Our lawyers have successfully defended many of our global clients in extradition cases and can be relied upon during times of crisis.

If you require legal advice concerning the cum-ex court decision, investment fraud law in Germany, your rights under German criminal procedure, extradition law or support and representation in an upcoming court case, don’t hesitate to contact us directly at or by using our contact form.

If you have a particular issue or legal question concerning the German cum-ex court decision, you can contact our law office at any time. Our lawyers for German business criminal law can be reached by phone, email and also provide video conferencing options. For more legal information, please visit our cum-ex defence lawyer page.

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The Cum-Ex Court Decision in Bonn: March 2020

In March 2020, a court case concerning cum-ex transactions was presented before the 12th Criminal Division of the Regional Court of Bonn. Due to the coronavirus pandemic and the precautionary actions taken to prevent its spread, the court could not provide a ruling until June 2020. The defendants in the case were UK citizens and were seen as central figures in the cum-ex transactions. The Bonn court’s decision outlined how the cum-ex transactions in question violated German tax law and also stated that the defendants’ participation amounted to the crime of tax evasion and/or aiding and abetting tax evasion.

The defendants were given reduced, suspended sentences due to their cooperation with the investigation. Both defendants confessed to their actions and, in the months leading up to the case, testified before the public prosecutor of Cologne. However, one of the defendants was issued a fine of €14m. This figure represents the benefits derived from the cum-ex transactions. They decided to appeal for different reasons with one defendant appealing the fine and the other appealing the suspended sentence they received.

Concerning the criminal law element, the Bonn Court held that the tax returns filed by the defendants concerning the acquired shares from cum-ex transactions where the tax credits or refunds were claimed (and granted) were false or incorrect. The court came to this decision based on the reasoning that the parties had not made an additional disclosure concerning the non-payment of underlying tax to the tax authorities. From there, the Bonn Court stated that the tax credit granted was not justified. In turn, the two defendants were deemed to have committed the crime of tax evasion and/or of aiding and abetting tax evasion.

The two defendants and the financial institution involved with the case decided to appeal the decision leading to the cum-ex court decision at the German Federal Court of Justice.

The Decision of the Federal Court of Justice

The case went to the German Federal Court of Justice after an appeal by the defendants. The court, based in the city of Karlsruhe, decided to uphold the judgment given by the Bonn court. This ruling by the German Federal Court of Justice stated that the cum-ex transactions amounted to tax evasion. This decision will have an enormous impact on the traders, investors, individuals and institutions involved or with some links to the transactions.

One of the presiding judges of the case stated that “there was no loophole here” regarding how the transactions were carried out. The judge went further to state, “The transactions practised were neither legal arrangements nor the mere exploitation of a legal loophole because the legal regulation was clear. Those who had profited from the transactions had enriched themselves at the expense of the general public.”

More cum-ex court cases will follow, with the prosecuting parties now more confident following the Federal Court of Justice’s decision. Approximately 100 banks and other institutions have been the subjects of investigation in the years following the discovery of the cum-ex transactions. The investigations will involve not only German citizens but also those based outside of Germany.

However, these cases are highly complex legal matters, and how this cum-ex court decision will impact other individuals’ cases remains to be seen. Consulting with expert legal counsel is always advisable in such issues.

Cum-Ex Trading in Germany

The cum-ex transactions refer to trading in the 2000s that revolved around what those involved considered a “loophole” in tax law. Although Germany was the country where most of the transactions took place, cum-ex transactions also happened in France, Belgium, Italy and Denmark. When considered as a whole, cum-ex transactions have led to losses in the billions of euros for the countries involved.

Cum-ex transactions involved taxes that were reclaimed several times over. Those involved aimed to ensure that it was difficult for the state to decide who was entitled to the tax refund. Participants in the cum-ex transaction network would lend each other shares in large companies, and then to the tax authorities, it would appear as if there were two owners of the shares when there was only one. This was achievable because the financial and supervisory authorities could not trace who owned the shares and when they owned them.

These transactions took place in rapid succession around the cut-off date for the distribution of dividends. Essentially, investors and banks traded shares with (“cum”) and without (“ex”) dividends and for these transactions, the participants had capital gains tax refunded, which they had never paid. Capital gains tax is automatically on the dividend when it applies to private individuals. However, other forms of investors such as funds and banks (institutional investors) are exempt from the tax. With the ensuing confusion, the parties involved had capital gains tax refunded on a huge scale.

Germany changed its laws in this area in 2012 to close down the opportunity for these transactions. Although several of the parties involved believed they were exploiting a loophole in the law, the decision by the German courts is a reason for concern. Those fearing prosecutions need to consider legal counsel and guidance concerning how to act.

Expert Advice from our Legal Team

When facing the fall-out from the cum-ex court decision, it is crucial to act quickly. Should you become aware of an investigation or even suspect that you are being investigated, it is recommended to consult with expert legal counsel. Early engagement with our team ensures that our lawyers can analyse the case from all angles and evaluate different strategies. Our full-service approach ensures that we can provide tailored solutions fitted to the needs of our clients.

If you require legal advice, don’t hesitate to contact us directly by phone at +49 241 4757140, by email at or by using our contact form to fully benefit from all that our firm has to offer.

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